Real Life Economics

Economics has been my life. Not theoretical economics but real life economics.

I was a geographer at Oxford and had the fortune, or misfortune, to do exactly the same course as Theresa May. If the current day students protest about May’s picture on the walls of the School of Geography, can you imagine what they would do to mine. Apparently, as of a few days ago, May’s picture is being rehung. The cynic could say, that is because her Brexit will be so weak as to be non-existent so it is now acceptable to hang her picture.

After going to Oxford, I went to India for a year on the Commonwealth Scholarship. I spent a year studying International relations and politics at one of India’s best postgraduate universities in Delhi. What an eye opener that was. India at that time was a socialist mire of bureaucracies and lunacy. My room cost a £1 a month but it took 3 days travelling around town and about £5 in buses and rickshaws fare to collect my £30 grant – there were so many signatures and rubber stamps needed, from offices ten miles apart.

From India, I applied for jobs in investment banks. It was just after big bang. Options were just starting and I ended up running an entire desk for the investment bank Merrill Lynch on Wall Street in New York, aged twenty four. I joined a week before the 1987 stock market crash. That was the first baptism by fire.

I was a trader, not a salesperson. I made prices. I lived or died by my decisions and what a training it was. I lived through the two major stock market crashes, the Russia debt crisis and many others, but the worst by far was the Asian financial crisis. In one month, the Indonesian Rupiah went from Rps 2000 to the dollar to Rps 20,000. Just imagine it. It is like the pound being worth £1.30 to the dollar now and being worth 13p by October. Interest rates went to 1000% overnight.

The Asian crisis is really important because it is an omen for what is happening right now, today, in the world. There is a loss of confidence in governments worldwide. You see this politically across the world. The financial result is that interest rates will rise and rise fast. We are going to have a public debt crisis as no one wants to own government bonds. We are already starting to see this playing out in Turkey, Argentina and South Africa – all of which I predict will eventually default. Similar stresses, I predict, are likely to hit the Euro in the next couple of years.

Here are some of the financial articles I have written:

This one was about the public debt crisis and our insane public sector debts.

I was commissioned to retract a Financial Times article and is about all the non-tariff barriers that the EU puts in place. As I write here, regulations and non-tariff barriers are a French national pastime.

You will find others on Conservative Woman (a blog that has nothing to do with the Conservative Party and defines itself as the philosophy, not the party), including on student debt, national health waste and Nike using cheap labour in Asia, and even possibly subcontracting to companies in China who use North Korean labour, whilst at the same time trying to bring down the Trump administration.

The Bruges group have published a number of my specifically financial articles. Here are some:

‘Meltdown in Turkey – an omen for the Euro’

‘The IEA essay prize is looking at the wrong side of the housing equation.’

‘Is the Euro going to collapse?’

‘Draghi doesn’t understand how the bond markets are dangerous.’

I am also particularly interested in what I call the ‘Economics of Madness’ or the economics of the poorhouse. Diversity: How much does it really cost? Not just the costs in terms of not having the best possible people but in terms of an entire ‘diversity’ industry that has been built up. I have said before, ‘You cannot eat diversity.’ I have written here on UKIP daily about the true costs of training so many female doctors.

I am interested in the true costs of immigration. Not just the job displacements but the costs in terms of crime, lawyers and fraud. I wrote about one benefit claimant and how her ridiculous sentence was so small that she ended up effectively on a grossed-up basis after tax, earning over £600,000 per annum. In many areas, crime seems to pay financially right now.

And finally, I am interested in public sector salaries and pensions. The grossly distorted salaries and pensions at the top and the difficulty of recruiting people at the bottom because of the pay and conditions. This also applies to our quangos, particularly HS2 and other vanity projects.

I hope to be able to bring economics back to the reality of people’s lives and to try to stop the disaster of mass immigration and the economic and cultural destruction of our once, great country.

[Ed: please note that the last sentence has been changed on Sept 14th, as requested by the author to reflect her true attitude towards Brexit!]

37 Comments

Tacitus
on September 21, 2018 at 8:50 pm

Dear Catherine, where you involved at all with the interim manifesto? Its economic and tax policy don’t seem to be very libertarian. Surely we should be radical in trying to cut the role of the state, and to do that you have to look at the NHS as it is 9% of GDP. We don’t say anything about the other major redistributions, namely housing benefit and tax credits, and are timid on income tax. If you didn’t have anything to do with it as you are just in position then fair enough, but if you did then I would challenge you to make it libertarian! Right now it seems to be about big government helping the small, helpless people, when libertarians argue people should have equality of opportunity and then stand on their own two feet, and our objective is to make them self-reliant rather than dependents of the state.

Well done Catherine, Question TIme beckons soon and you are well placed to handle all the usual Beeb behaviour from ‘dim’bleby downwards. Quality spokespeople urgently required by UKIP to spread the word via the democratic method which will bring what’s left of Middle England over to us and win seats in Westminster. Looking forward to hearing your piece at the Nat Conf next week, if it’s Friday that is. Keep up the good work – a potential leader in the future.

A lot of the problems addressed derive from what can be distilled down into the increasingly misleading nature of GDP measurements. If, for example, you work in the City dabbling in derivatives and make a lot of money you will have no problem persuading yourself you are producing wealth. Likewise the diversity and immigration industries and much else. GDP fakery has got much worse I think and has now generated a book by the excellent David Graeber which Norman mentions. It’s used as propaganda to persuade us what a great job politicians are doing.

The visionary John Prescott had an excellent plan to increase GDP. Compulsory annual national hot tap inspections to ensure the water did not scald. Sadly this boost to our welfare never happened.

Brilliant article! Great move by Gerard to appoint an Economics Spokesman…woman even! UKIP has too often been seen as a ‘one man band’ but with powerful, knowledgeable spokesmen and woman, we could really get back on our feet.

I think Catherine that you seem to have muchof the City worked out. However in any except the wonderlands of banking,insurance et al. there’s a real economy seperate from Governments and illusary money making on the basis that the taxpayer is going to pay. The one that pays the tax. And Mrs May is working hard to finally kill it off, and it’s the one that matters

It’s a bit cheeky but UKIP is heavy with elderly Managers , exCEOs, accountants, businessmen, who understand these levels of business.

This is the layer of life that holds the City up. And our political class is ignorant, wilfully blind, stupidly forever peering upwards up their superiors. It can hold the country above water if the City and politics vanished to the moon ( or Phucket ) . Among our pensioners are people who can make cars, computers, telephones, print, mould plastics,. and make machines to make them. We have miners, steel makers brassfounders . We know Electronics, hydraulics, the lot . We can make many new currencies. So, just ask. Every one of us has at least two theories. And many of us hate spellcheck slowing us down.

From Our Own (UKIP) Correspondent we have a great challenge in promoting the best Brexit policy which will maintain a mutually beneficial trading relationship with Europe
We only wish to sever our political links with Brussels. The EU is supposed to be a trading organisation, not a political one.

– and on why our currency rests 97% on credit, the monetisation of financial indebtedness, mostly brought into being through the activities of big ticket industries like construction (and war).

Does the role of construction in this regard explain the obsession of UK governments for at least 100 years in concreting over the countryside whilst exacerbating the housing crisis by importing yet more people, many from places with enormous expanses of undeveloped land?

Walk round the City of London and you will see the creation/destruction principle in action – demolition and rebuilding of office developments barely 20-30 years old. And have the Greens ever objected…?

Hansard, 5th March,1997, vol. 578, no. 68, column 1869-1871; the Earl of Caithness:
“We all want our businesses to succeed, but under the existing system the irony is that the better our banks, building societies and lending institutions do, the more debt is created. . . . The next government must grasp the nettle, accept their responsibility for controlling the money supply and change from our debt-based monetary system. My Lords, will they? If they do not, our monetary system will break us and the sorry legacy we are already leaving our children will be a disaster. “

Catherine a great article! What I have to say may sound a trifle off-topic, but please bear with me.

With regards comments of possible pending economic calamity, it should be noted that given the Sun’s recent and current behaviour it seems likely that we will see a shift in climate to something similar to what was experienced during the Dalton Minimum or even the Maunder Minimum. During those times there were periods lasting many years when droughts, floods, heat waves and unseasonable and/or extreme cold led to crop-failures, famine, civil unrest, revolutions and wars.

Current grain stocks, recent harvests and food prices seem to suggest that this is already under way, especially in South America and Australia.

In modern times one would expect adverse agricultural conditions to affect agricultural markets and destabilise some economies, especially those where food shortages occur.

Especially so if current conditions continue as expected and are not just a blip.

So yes, we need to leave the EU because among other things
we will definitely need to be in complete control of our fish!

The way Mrs May is going about it we’ll never survive. She believes trade is about Civil Servants doing whatever it is they think they’re doing, with her permission, with whatever it is she thinks she is doing.

Required reading for all, and especially any MP or aspiring MP is s great book called ‘How an Economy Grows and Why it Crashes’ by Peter Schiff. I think i got that right but internet search will find it. It is like no other economic textbook I have come across and demonstrates the folly of overblown government spending and high taxes. Eminently readable .

Try reading ‘Bullshit Jobs: A theory’ by David Graeber. ( Allen Lane) It describes work in much of the public services, ngo’s and the so called 3rd sector and larger private companies brilliantly. Always been there of course but expanded to a degree unimaginable during the Blair/Brown years. Presumably under the austerity cuts most of them have gone.
( some hope).

Catherine. I see your background is financial not industrial economics.
So who will challenge obergruppenfuhrer Ralf Speith (of Jaguar Land Rover ) when he says motor components criss cross the Channel several times before final assembly ?
When I do the washing up I cross the kitchen floor once and wash up. I do not criss cross the floor several times

When I change parts on my car I get all tools parts etc together .I do not criss cross the channel or even my driveway .
Brexit then can enable the rationalisation of supply chains by cutting out the supply chain of madness.

Unless Jag land Rover is just a badging plant for German components ?
I think we should be told.

Don’t even think about the mini, or Cowley etc.” Just in time” is a ridiculous and a lucrative scam, as is the present version of wonderful out-sourcing scams, varying from VAT fraud to simple supplier fraud and long firm fraud and tax planning.. These are the only reasons for them. As for ‘traceability’ there has never been a better method of destroying a manufacturer.

Catherine , I wonder why the whole of the City is not pro-Brexit . I saw 5 mins of the Labour parliamentary remain committee try to get the bankers to say Brexit is a disaster. JP Morgan sent along an underling to say its not a problem- despite Jamie Dimon’s leading role in project fear.
The bankers said in not so many words ..we profit from risk. We work in 200 countries in the world . Not a week goes by without flood fire volcano riot revolution war . Whats the fuss about Brexit ?
The City- Lloyds etc manage risk far better than commie bureaucrats because someone gets the sack if they try to resist economics, ie get it wrong

How about coming up with a libertarian economic policy for UKIP. This should attack the 3 pillars of socialism in the UK, namely the NHS, Tax Credits and Housing Benefit. Overall, government share of GDP should drop from mid-40s to 20% or so, cannot do this with a publicly-funded health system.

There is a fourth and potentially and imminantly totally destructive pillar. The unions. .Unions are essential to good management, particularly ,of larger firms, where the middle management connection has been displaced by computer. Leaving Top and senior management, who actually believe you can run a business on a computer, totally ignorant of what is happening, and often easily fooled.

This is yet another area where UKIP is useless. All these pillars are only there because of UKIP’s failure. These should be part of our manifesto .

UKIP has never really articulated an economics policy to my knowledege. It is a very important consideration for a great deal of the electorate to know that a party is competent in this area. I have long argued that UKIP a libertarian party of small government and individual responsibilty should be the natural party of choice for small and medium enterprises with its millions of owners. Let us not underestimate the opportunity here to make much headway for UKIP.

TG Spokes raises a good initiative below recommending the setting up of a subsidary policy group open to pursue its own stream of funding to shape UKIPs economic policy and as he says roll this format out into other areas too.

I have every faith that Catherine has the character, qualifications and zest to develop this hugely important policy area which has the potential to attract much needed sponsorship and valuable input from the small and medium sized business sector.

A coherent economic policy has always been gently skated around, I believed this was because we were trying to draw support from Labour as well as Tories and although Nigel was an out and out supporter of Thatcherism we didn’t wish to alienate those pro Brexit Labour supporters who were not believers in low taxes and free trade.

Adrianne From next March if this Party is to exist we can no longer sit on the fence on this issue we must be able to produce a coherent economic policy that the public can comprehend and our activsts can communicate in order for the voters to decide if they can support us.

Me too and they either have no understanding or are to thick to try. Add in pension liabilities and personal debt and the figure is astronomical as I’m sure you know. 3.5 billion on’ renting (pcp’s) new cars in the first for months of this year alone, along with a huge percentage of defaults. A bubble about to burst. But hey who cares? The Bake Off is back!

A couple of years ago Catherine and I had a discussion in a car park after a UKIP meeting in Great Yarmouth, kicking around ideas about what the future will bring to Europe. History informs us to some extent: hyperinflation or military adventurism. Or, of course, both.

There is another scenario: the rise of a charismatic leader without scruples or ideals; a subset of the population resented by the majority; a complacent ruling class which ignores the suffering of the weak and the poor; civil war. If even the Swedes are becoming resentful then things are getting very bad indeed.

What should the UK do? Il faut cultiver notre jardin. Scrap HS2 and the EPRs. Reduce immigration to the tens of thousands. Frack as an emergency measure so that whatever happens the lights won’t go out. Invest ten thousand million pounds a year from the overseas aid budget in developing SMRs. And so on. Will we do it? With May in charge? With a Conservative government in hock to globalising big business? With a Labour Party led by a man who thinks Venezuela only failed because it didn’t lock up enough enemies? With political parties which think that the most important matter to deal with, after BRINO, is defining a wolf-whistle as a hate crime?

Buy cabbage seed and seed potatoes. And horse muck. Things are about to turn nasty.

The comfort of the rich depends on an abundant supply of the poor….Voltaire was not daft …..We have the government we deserve. In Sweden, Italy, Austria and Germany, we are witnessing a slow but inevitable shift. History indeed warns us what may happen. But putting aside Europe for the moment, Britain, fundamentally, has no resilience any more. The knocks of the past (war/inflation/loss of influence and Empire) are nothing compared to what smells to me like an impending state of chaos, just around the corner..
Brexit or no Brexit, Britain is not prepared for the next year, let alone the medium or long term. A two-trillion debt and triple-billion yearly deficits combined with even a two percent interest rate rise – in probably not longer than a year- will drop Britain to its knees.
The medicine is a political no-no.
So the wealthy are already preparing . Capital flight will soon be a reality. Already we are seeing a gradual breakdown in law and order and a lack of will to address it.
Things are about to turn nasty.

You have my total support. But I’m a moaning old sod. What the devil are these spokespersons supposed to do. It is my belief that Gerard should set up UKIP subsidiaries like for example UKIP Sanity in Economics Ltd/Party ( Creating a franchise with its own income stream etc but controlled by unchangeable mini A&M or whatever .etc etc etc ) ( .you’ll know ). { Or Tommy Robinson of UKIP on Islam Ltd ) These could be used to channel and grow UKIP , and its influence. I suspect that this would upset many of the hierarchy who prize their titles and sense of non existant importance. With their own income streams you’ld soon find what was popular .

Catherine congratulation on the resume I am also interested in the economic side of life.
Diversity and immigration really are two sides of the same coin and I do agree with you that all economic models I have seen proving immigration benefits for the country are pretty shallow (usually tax income take away financial benefits). Depressing entry jobs wages, making training obsolete, public services cost, social housing or costs of adjusting society are omitted.
Public sector and the way money is wasted not only on salaries is really depressing. If you like to examine vanity projects I recommend a closer look at what is happening to London’s Crossrail.
I cannot agree with you that Brexit (unless you mean the way “our” government is managing this process) is a disaster but as for the other factors will not argue.
Topics I am happy to discuss are taxation, budgets (both local and national), nanny/welfare state.

Catherine – great article! I’ve written about aspects of this and I’ve given up for now as I suspect that some people think I’m a crank.

I’m not an economist but I can sort of understand the subject. In the eighties I worked in the city, until I decided to move out of London. Some months after I left, I was watching The Money Program on TV and it was all about the man that used to sit at the desk next to mine, it was about massive fraud by some of his clients in which he had colluded. I always had a feeling his clients were dodgy, they were immigrants from Asia and quite unscrupulous, we’ve been taken for fools for far too long.

Economically and in many other ways the government has been leading us on a road to perdition for many decades and they just refuse to acknowledge the reality of the situation.

Thanks for the article, I could pick up on many of the points that you’ve raised, some of them make me seethe so maybe I will at some point.

As for the economic future of our country, I really don’t like what I’m seeing and sometimes wonder if it’s better to keep quite, people will have to face the reality sooner or later and that day is fast approaching.

It is indeed, but is hardship not having the latest reg car and two holidays a year. Reality is apparently life portrayed in T.V ads and cooking programmes, that I suppose at least keeps the masses quiet presumably thats the end game. God knows how long its going to last, driving around these days, it seems nobody is working, any leisure destination full day after day with people either buying expensive tat or eating and drinking in cafe’s.
Its an odd economy that survives by selling tat and coffee , finance deals for everything particularly cars leisure and holidays.